Contractors see bleak prospects for 2010

PORTLAND, Ore. (AP) -- Projects such as the new Solarworld headquarters in Hillsboro helped the construction industry survive in 2009. Prospects for 2010 are looking less promising, industry players say.

Bryan Ward is one such pessimist. The president of Skyward Construction Inc. in Ridgefield, Wash., Ward said his firm has a backlog of roughly $5 million worth of contracts, compared to the nearly $20 million it had a year ago.

Other firms have encountered similar drop-offs, he said.

"It's terrible," Ward said.

Gene Wellman also predicts a difficult 2010. Wellman, an owner of Triplett Wellman Inc. in Woodburn, said the firm, which specializes in school and church construction, wants to earn $30 million in revenue -- half of its total from 2009.

His company laid off 20 people this past year, and Wellman said more layoffs would occur if sales goals aren't met.

Economic woes, in Oregon and around the country, leave little room for optimism. State and national jobless rates have reached double-digits, and construction employment fell "everywhere except North Dakota" this past year, according to a recent analysis of federal data by the Associated General Contractors of America.

Analysts say the recession may have technically ended or is close to ending in Oregon, but "we are not at the point of feeling the beneficial effects of a recovery," Portland's Bureau of Development Services said in an economic forecast on Nov. 25.

Local contractors agree, saying there are few, if any, signs of a quick turnaround for their sector. They say lending for private-sector commercial jobs will be tight in 2010, while high unemployment, slow population growth and lack of business expansion also will crimp their revenues.

Meanwhile, Oregon's most recent Economic and Revenue Forecast, published Nov. 19, said the expectation for construction job losses in 2009 was 15,500. That 16.3 percent drop brings the sector's employment to 79,200.

The report said another 7,000 construction jobs would be lost this year, an 8.8 percent decline, while 300 would be added in 2011, a .3 percent increase.

Steve Malany, president of P&C Construction Co. in Gresham, said some contractors will go out of business this year because they've lost too much money or want to prevent future, crippling losses.

"I think we're gonna be surprised at the number that do fold," he said.

P&C this year is slated to build, among other things, a new elementary school and a high school performing arts auditorium, both in Scappoose. Malany said the company's workload had been divided evenly in recent years between public-sector and private-sector jobs, but now, up to 90 percent of its work comes from government bodies.

According to Malany, P&C expects $40 million worth of sales this year, down from $45 million last year and $80 million in 2008.

"There's just not a whole lot of private work out there right now," he said.

Meanwhile, it has become increasingly competitive to earn coveted government contracts.

Ward said his company bids against 20 other general contractors for "every single" government job, and Skyward hasn't earned a public works contract in at least six months.

In one instance, Skyward tried to land a contract to build a new grandstand at Camas High School, in Camas, Wash. He said there were 17 bids, and the lowest was $600,000 less than Skyward's.

Ward said if his firm had submitted a bid equivalent to the winning bid, Skyward would have lost money on the project. He noted such basement-low bids are now "typical."